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1989 DIGILAW 721 (ALL)

Varanasi Tendu Patta Vyavasayee Sangh v. Krishi Utpadan Mandi Samiti

1989-10-18

A.N.VARMA, D.P.S.CHAUHAN

body1989
JUDGMENT D. P. S. Chauhan. - Consequent upon realisation of market fee by the Mandi Samiti directly from the petitioners, in respect of transactions of buying of the Tendu leaves from the U P. Forest Corporation and Tarai Anusuchit Jan Jati Vikas Nigam. they approached this Court by way of writ petitions under Article 226 of the Constitution of India, seeking in main and stressing upon a relief for issue of a writ in the nature of mandamus commanding the respondent Mandi Samitis for not demanding or realising the market fee directly from them. The bunch of such writ petitions involving same controversy came up for hearing before us and is proposed to be disposed of by a common judgment. 2. Here in these petitions, we are concerned with two State enactments :- (i) the U. P. Tendu Patta (Vyaper Viniyaman; Adhiniyam, 1972 (for brevity, hereinafter referred to as 'the Tendu Patta Act') and the rules framed thereunder (for, brevity, hereinafter referred to as the Tendu Patta Rules) whereunder in matter of Purchases and distribution of Tendu leaves and for allied matters, a state monopoly has been created and the State Government vide Notification No. 1087/XIV-2-29/83 dated April 7, 1983, appointed the U. P. Forest Corporation, Lucknow (for brevity, hereinafter referred to as 'the Corporation') as its agent which was succeeded by the Tarai Anusuchit Jan Jati Vikas Nigam Limited, Lucknow (for brevity, hereinafter referred to as 'the Nigam') whereunder there were two categories of buyers of Tendu leaves (i) the manufacturer of Bidis and (ii) the exporters of Tendu leaves, and such buyers are required to get themselves registered with the concerned authorities and are issued a certificate of registration. Only such persons are entitled for participation in the buying of Tendu leaves by giving tender or offering bid in the auction, who, on settlement of sale in their favour, are appointed as purchasers and had also to fill up an agreement. The Tendu leaves are the commodities used only in the manufacture of Bidis ; and (ii) the U. P. Krishi Utpadan Mandi Adhiniyam, 1964 (for brevity, hereinafter referred to as 'the Mandi Act') and the rules framed thereunder (for brevity, hereinafter referred to as 'the Mandi Rules) where under the entire State was divided into various market areas and Committee constituted for each area was called the Mandi Samiti. The Tendu leaves come within the category of specified agricultural produce under the Mandi Act. 3. In some writ petitions purchases of Tendu leaves were made from the Corporation and in some from the Nigam. In writ petitions No. 282 of 1988, 4308 of 1986, 4307 of 1988, 22770 of 1987, 21118 of 1986, 21405 of 1986 and 2t406 of 1985, the petitioners are the buyers of Tendu leaves from the Corporation/the Nigam in the capacity of exporters of Tendu leaves ; whereas in writ petitions No. 18589 of 1986,928 of 1987 and 1307 of 1987, the petitioners are the buyers of Tendu leaves from the Corporation for selling the same to the Bidi manufacturers within the State. 4. The controversy in all these writ petitions hinges upon two questions : (i) Whether the Corporation or the Nigam and the petitioners are 'traders' within the meaning of clause (y) of Section 2 of the Mandi Act; (ii) Whether the Mandi Samiti can realise the market fee on the transaction of purchases made by the petitioners from the Corporation or the Nigam directly from them. 5. We have heard the learned Counsel for the parties at length in support of their contentions, 6. The submission made by the learned Counsel for the petitioners, Sri V. K. Singh, who represents the petitioners in all the writ petitions, is that in view of sub-clause (8) of clause (b) Section 17(iii) of the Mandi Act, the petitioners are not liable to pay the market fee directly to the Mandi Samiti as the transaction of sale on Tendu leaves was between the Corporation or the Nigam and the petitioners is from trader to trader and consequently the liability to pay market fee is on the trader selling the produce, and, in this view of the matter, the Mandi Samiti is not entitled to make any demand and realise market fee directly from the petitioners. 7. 7. The learned Counsel for the respondents, Sri B. D. Mandhyan, who represents all the respondents in all the writ petitions resisted the claim of the petitioners by making the following submissions ; "First, that even assuming without admitting that Corporation/Nigam is a "Trader" within the meaning of clause (y) of Section 2 of the Mandi Act, the ultimate liability of payment in respect of market fee to the Mandi Samiti rests with the petitioners, they being the purchasers of Tendu leaves ; the Mandi Samitis are hence within their rights to make the demand and realise the market fee on such transactions of Tendu leaves directly from the petitioners and any deposit of market fee made by the Corporation or the Nigam would not make any difference : Secondly, that the Corporation/Nigam who are the agents of the State Government, are not the traders within the meaning of clause (y) of Section 2 of the Mandi Act, as the State Government is the purchaser of Tendu leaves and the matter would, as such fall under sub-clause (2) of clause (b) of Section 17(iii) of the Mandi Act where under the liability of payment of market fee to Mandi Samiti is that of the petitioners being the purchasers of Tendu leaves ; Thirdly, that if the Corporation/Nigam is held to be the trader, then, the petitioners are liable for the payment of market fee to the Mandi Samiti on such transactions of buying of Tendu leaves from the Corporation/Nigam, as they are not traders within the meaning of clause (y) of Section 2 of the Mandi Act being persons not in the ordinary course of business engaged in buying and selling of Tendu leaves within the same market area, and as such they would fall under sub-clause (4) of clause (b) of Section 17(iii) of the Mandi Act ; and Fourthly, that these are not the cases worth interference by this Court in discretionary jurisdiction under Article 226 of the Constitution of India. 8. Before turning to consider the controversy involved in the petitions, we consider it apt, in order to appreciate the scheme regarding payment of market fee or recovery thereof, to compare the provisions of Section 17(iii)(b) of the Mandi Act, as they stood prior to 1973, between 1973-78, and thereafter : (a) The provisions of Section 17(iii)(b), as originally enacted, reads as under : "77. Powers of the Committees. - A Committee shall, for the purposes of this Act, have the power to - (i) ....................... (ii) levy and callect: * * * * * (b) market fee on transaction of sale or purchase of specified agricultural produce in the principal market yard and sub-market yard from such persons and at such rate as may be prescribed, but not exceeding one-half percentum of the "Price of the specified agricultural produce sold or purchased therein". Rule 66 of the Mandi Rules, 1966, provided for realisation of market fee from seller. Rule 68 provided for realisation of market fee in the following manner: (i) if the specified agricultural produce is sold through the Commission Agent or directly to the trader, the Commission Agent or trader, as the case may be, shall charge market fee from the seller in sale voucher in Form No. VI and deposit the amount of market fee so realised with the Market Committee in accordance with the directions of the Committee issued in this behalf ; (ii) if the specified agricultural produce is sold directly by the seller to the consumer, the market fee shall be realised by the servant of the Market Committee authorised by it in this behalf. (b) By the U.P. Act No. 13 of 1973, as re-enacted by the U. P. Act No. 20 of 1974, the burden of payment of market fee, which was earlier, on the seller shifted on the purchaser, and amended provisions read as hereunder : "(b) market fee, which sh ill be paid by purchaser on transaction of sale of specified agricultural produce in the principal market yard or sub-market yard at such rates, being "not less than one percentum and not more than one and a half percentum of the price of the agricultural produce so sold, as the State Government may specify by notifications in the Gazette." (c) By the U. P. Act No. 6 of 1977, with effect from 20-12-1976, in clause (b) of Section 17(iii) of the Mandi Act, the words 'principal market yard or sub-market yard' were substituted by 'market area' and as a result whereof, theoretically, the market fee become leviable in the entire market area on the sale of specified agricultural produce. (d) Section 17(iii)(b) of the Mandi Act was again amended by the U. P. Act No. 7 of 1978 with retrospective effect, i.e., from 12-6-1973, and the amended provisions read as follows. "17. Powers of the Committees. - A Committee shall, for the purposes of this Act, have the power to - (b) market fee, which shall be payable on transactions of sale of specified agricultural produce in the market area at such rates, being not less than one per centum of the price of the agricultural produce so sold, as the State Government may specify by "Notification, and as such fee shall be realised in the following manner - (1) if the produce is sold through a commission agent,the commission agent may realise the market fee from the purchaser and shall be liable to pay the Committee ; (2) if the produce is purchase directly by a trader from a producer, the trader shall be liable to pay the market fee to the Committee; (3) if the produce is purchased by a trader from another trader, the trader selling the produce may realise it from the purchaser and shall be liable to pay the market fee to the committee ; and (4) in any other case of sale of such produce the purchaser shall be liable to pay the market fee to the Committee." This provision as amended by the U. P. Act No. 7 of 1978 is an important one so far as the controversy involved in the present writ petitions is concerned, as it embodies an integrated scheme fixing the liability regarding the payment of market fee qua the Mandi Samiti. 9. The objections as raised by the respondents may be decided first, as the same would have direct bearing on the determination of the argument raised by the petitioners, and as such we proceed to deal with them seriatem. 10. We proceed to deal with Mr. Mandhyan's first submission. 9. The objections as raised by the respondents may be decided first, as the same would have direct bearing on the determination of the argument raised by the petitioners, and as such we proceed to deal with them seriatem. 10. We proceed to deal with Mr. Mandhyan's first submission. On the phrasealogy used in sub-clause (3) of clause (b) of Section 17(iii) of the Mandi Act " Trader selling the produce may realise it from the purchaser and shall be liable to pay the market fee to the Committee", the respondents argument built up is that the ultimate liability in respect of market fee rests on the purchasers, i.e., the petitioner, and as such the Mandi Samitis are well within their rights to recover the same directly from the purchasers. The argument has no force. There is nothing like ultimate liability, as the provision is itself specific and clear. The four sub-clauses are mutually exclusive. The liability for payment of market fee created under sub-clauses (1) and (3) differs from that under subclauses (2) and (4) on the other side. Under sub-clauses (1) and (3), the statute has fixed the liability in regard to payment of market fee qua the Mandi Samiti on the selling agent though the selling agent has been authorised to realise it from the purchasers. The words "trader selling the produce may realise it from the purchaser" do not create any liability for payment of market fee qua the Mandi Samiti on the purchaser, but only creates a charge on them qua the trader selling the produce. Under these clauses, the power conferred on the purchasing trader to realise the fee from the purchasers is coupled with obligation to pay. The word 'may' in the context really a command to the selling trader to realise from the purchaser and pay it to the Mandi Samiti. 11. In these circumstances, there does not arise any question of ultimate liability. The liability of payment under sub-clause (3), qua the Mandi Samiti clearly rests on the trader selling the produce who is enabled by statute to recover it from the purchaser. The Mandi Samiti cannot hence realise market fee in a case covered by clause 3 of Section 17(iii)(b) from the petitioners. 12. The liability of payment under sub-clause (3), qua the Mandi Samiti clearly rests on the trader selling the produce who is enabled by statute to recover it from the purchaser. The Mandi Samiti cannot hence realise market fee in a case covered by clause 3 of Section 17(iii)(b) from the petitioners. 12. In the case of Roller Flour Mills and others v. Krishi Utpadan Mandi Samiti, 1981 ALJ 75, the Division Bench held, that "in cases falling under clauses (1) and (3) of Section 17(iii)(b) of the Mandi Act, the Act fixes the liability or obligation tor payment of market fee on the seller and authorises such seller to pass on the burden of market fee on the purchaser The Mandi Samiti can recover market fee only such persons on horn the liability to pay the same has been fixed by Section 17t.iii)(b) of the Act". With respect we entirely agree. 13. Further clause (b) of Section 17(iii) itself says "such fee shall be realisable in the following manner." So the four sub-clauses lay down only the manner of realisation of Market fee which could only be from the persons on whom the liability is created by the statute. It is a settled principle of law that when a particular mode of doing something is specified by statute, other means of doing that thing are prohibited by necessary implication. Reference may be had to the case of S. P. Srivastava v. Benaras Electric Light and Power Co. Ltd., Bhelupura, 1968 ALJ 257 (FB). 14. We then turn to the second submission of Sri Mandhyan. In the matter of purchase and distribution of Tendu leaves allied matters, the Slate Government enjoys a complete monopoly. The State Government is not the producer of entire Tendu leaves. It purchases the Tendu leaves of other growers as well and sells all the Tendu leaves including those grown by it to the buyers through its agents, as already stated above. The question for consideration is as to whether in such circumstances the Corporation/Nigam would be a 'trader' within the meaning of clause (y) of Section 2 of the Mandi Act. This question is no more res Integra. The question for consideration is as to whether in such circumstances the Corporation/Nigam would be a 'trader' within the meaning of clause (y) of Section 2 of the Mandi Act. This question is no more res Integra. The Supreme Court in Ram Chandra Kailash Kumar v. State of U. P., AIR 1980 SC 1124 , laid down the following principles : "We have coined the expression producer-trader for a person who is both a producer of agricultural produces and himself trades in it. For the purpose of the Act, he ceases to be a producer and becomes a trader only as the definition indicates." 15. In U. P. Forest Corporation v. Krishi Utpadan Mandi Samiti, 1985 UPLBBC 1192 this Court has already held the Forest Corporation dealing with the Tendu leaves is a 'trader'. Thus, it is settled that the Corporation/Nigam, who are dealing with the Tendu leaves as agent of the State Government, produced by the State Government and bought from the other Tendu leaves growers, are traders within the meaning of clause (y) of Section 2 of the Act. It is apparent from the submission made by the learned Counsel for the respondents that he proceeded on the basis admitting the purchasers of Tendu leaves, i.e., the petitioners, as traders, as the argument was that sub-clause (2) of clause (b) of Section 17(iii) of the Mandi Act would be attracted. It is a case where sub-clause (2) could not be attracted. 16. In Ram Chandra Kailash Kumar's, case (supra) the Supreme Court held that there cannot be dual realisation and if the market fee is realised by the Mandi Samiti from purchasers then the same cannot be realised from the petitioners in view of the retrospectively of the provisions of Section 17(iii)(b) of the Mandi Act On that principle, in the present case also the argument cannot stand that the Mandi Samiti has a right to realise the market fee which is an ultimate burden on the purchaser irrespective of the fact whether the market fee is deposited by the Corporation/Nigam by saying that the same would not make any difference. 17. We then take up Mr. Mandhyan's third objection. The submission was that the petitioners are not traders within the meaning of clause (y) of Section 2 of the Mandi Act. We do not agree. 17. We then take up Mr. Mandhyan's third objection. The submission was that the petitioners are not traders within the meaning of clause (y) of Section 2 of the Mandi Act. We do not agree. Clause (y) of Section 2 provides t "Trader means a person who in the ordinary course of business is engaged in buying or selling of agricultural produce as a principal or as a duly authorised one or more principals and includes a person engaged in processing of agricultural produce." 18. The argument was that the petitioners do not carry on business both of buying and selling of Tendu leaves within the same market area, and as such they are not traders within the meaning of the definition of the word 'trader'. The submission has no merit. The common case of the petitioners, as set up in the writ petitions, is that they carry on business of buying Tendu leaves from the Corporation/Nigam and in some cases as exporters for sale in the States of Bihar and West Bengal, and sometimes they also sell to the third party at the initial stage of delivery at Delivery Godowns of the Corporation/Nigam and in some cases they are buyers of Tendu leaves for selling the same to the manufactures of Bidis within the State and in such cases they sometimes sell the Tendu leaves directly to the third party at the initial stage of delivery at the Delivery Godown of the Corporation/Nigam. 19. These assertions have not been specifically controverted in the counter affidavits. Indeed in the counter-affidavit tiled on behalf of the Mandi Samiti the respondents themselves have set up the case that the petitioners are the whole-sellers of Tendu leaves. It may, therefore, be safely assumed that the petitioners are traders being persons who are in the ordinary course of business engaged in the business of buying Tendu leaves. 20. It may be noted that the words used in the statute are "buying or selling "and not" buying and selling." In view of this it is not necessary for one being a trader within the meaning of clause (y) of Section 2 of the Mandi Act that he should be both buyer and seller in the same market area. 20. It may be noted that the words used in the statute are "buying or selling "and not" buying and selling." In view of this it is not necessary for one being a trader within the meaning of clause (y) of Section 2 of the Mandi Act that he should be both buyer and seller in the same market area. Further the words "in the ordinary course of business is engaged in the buying or selling 'means the transaction of buying or selling must be in the ordinary course of business and not for self-consumption. It may further be noticed that, in the definition clause, even the person who is engaged only in processing agricultural produce in a particular market area, is termed as 'trader'. Thus, the petitioners are traders within the meaning of clause (y) of Section 2 of the Mandi Act and their cases cannot fall under sub-clause (4) of clause (b) of Section 17(iii) of the Mandi Act. 21. The last submission of Sri Madhyan also has no substance, as we have already found that the liability to pay the market fee to the Mandi Samiti, in the present cases, is statutorily fixed under sub-clause (3) of clause (b) of Section 17(iii) of the Mandi Act on the trader selling the produce, and as such the Corporation/Nigam is bound to discharge the statutory obligation qua the Mandi Samiti and the selling trader is authorised to charge the market fee from the purchaser. We do not find anything which dis entitles the petitioners for granting the relief prayed for. 22. The submission of the petitioners that in view of sub-clause (3) of clause (b) of Section 17(iii) of the Mandi Samiti is not entitled to realise the market fee directly from the petitioners in regard to transactions of sale of Tendu leaves between the Corporation/Nigam is correct and accepted. 23. In the result the petitions succeed and are allowed. The respondent Mandi Samiti is restrained from realising the market fee directly from the petitioners in respect of the transactions of purchases of Tendu leaves made by the petitioners from the Corporation/Nigam. But this direction will not prejudice either the right of the Mandi Samiti to realise the Market fee from the Corporation/Nigam or the right of the Corporation/Nigam to recover the Market fee from the petitioners.